City adds lien on TOT collections

Acting on a recommendation from City Attorney Mike Fitzpatrick, four of Anderson's five-member city council unanimously introduced a modification of the city's existing Motel Tax Ordinance to allow the city to place liens on motel properties if the motel is delinquent in quarterly payments of the 10 percent Transient Occupancy Tax.

The council is expected to enact the ordinance amendment at its Feb. 16 regular meeting. The amendment would take effect 30 days after it is enacted.

The lien has the "force, effect and priority of a judgment lien for the payment of tax and shall continue for ten years" states a portion of the amendment modifying Section 3.40.130 of the Anderson Municipal Code.

It does not, however, supersede any recorded lien attached to the motel property prior to the date when the TOT delinquency became a lien, the amendment clarifies.

Four motels in Anderson - the Best Western, Baymont Inn, Valley Inn and Gaia Hotel & Spa - combined typically contribute between $50,000 and $100,000 following each fiscal quarter. The TOT flows directly into the city's General Fund, City Manager Dana Shigley said Thursday, Feb. 4.

The amount varies dramatically since more tourists stay at the city's motels during the late-spring, summer and early-fall months rather than during the colder and rainier parts of the year, Shigley explained.

In March 2009, the four hotels paid a total of $50,000. By the quarter ending in June 2009, the TOT payment had nearly doubled to $80,000. In Sept. 2009, the TOT payment reached a high of $95,000. And after the quarter ending Dec. 31, 2009, the TOT amount received by the city was just $35,000, she said.

However, that amount was paid by just three motels.

The Gaia Hotel & Spa has yet to make its December 2009 quarterly payment, which became delinquent Feb. 1, Shigley said.

The other motels are showing about a 7 percent decline in room reservations during that final quarter when compared to the same quarter a year ago, so if the Gaia is experiencing the same sort of economic hit, its share of the quarterly TOT would be approximately $20,000, Shigley calculated.

"I don't really know what they owe us because it depends on the numbers they report to us and we haven't yet received their occupancy report," she said of the Gaia Hotel.

Several phone messages left Friday, Feb. 5, for developer Wen I Chang of the Atman Hospitality Group, Inc., in South San Francisco, owner of the Gaia Hotel & Spa, were not returned by Monday's press deadline.

When council member Melissa Hunt asked city staff members during the council discussion about the need for such an amendment, Fitzpatrick responded, "This is just another tool to have in our tool kit if taxes ever become delinquent on any of our motels."

Fitzpatrick went on to explain that in Corning, where he also provides legal counsel on a part-time basis, the council found it necessary to include a similar amendment since one of that city's motels had been delinquent.

Fitzpatrick declined to name the Corning motel, saying instead that the matter had since been resolved.